It looks like NE Tennessee housing sales are already beginning to bounce back from its COVID-19 slowdown.
Nationwide, applications for purchase mortgages gained for the seventh straight week, according to the Mortgage Bankers’ Association (MBA). That is 18% higher than a year ago, and further evidence that housing is heading into an intense summer home-buying season. There are similar reports from local lenders. It also a reversal of the refinancing surge that began late last year, and the forbearance pace is slowing.
Locally, May’s number of closings has moved past the April total, and the number of pending sales is increasing. The pending sales number is a key because it’s a leading indicator, while May’s closings are a trailing indicator.
The numbers come hand-in-hand with the reopening of the local economy, releasing pent-up demand. Folks who were already thinking about buying before the “stay-at-home” situation are more motivated now than ever.
Housing market analysts and economists, like the National Associations of REALTORS® (NAR) Chief Economist Lawrence Yun, have predicted a surge in the market as soon as the economy began reopening. Now, some who are looking at 2021 and beyond are starting to talk about the “Roaring 2020s for Housing.”
Mortgage rates made a small increase last week, but they are so low it probably will not move buyers one way or another. At the same time, they continue working in favor of buyers because the lower rates mean lower average monthly mortgage payments. It is not a huge advantage, but buyers welcome it in a market where affordability has become an increasing challenge.
The one thing that has not changed is inventory. It is tight and getting tighter in some price ranges and some submarkets. So, what does that mean for the consumers who are coming out of the “stay-at-home” mode?
I recently wrote a blog titled “How to make the best purchase offer in a seller’s market.” It worthy of rereading. It can be found on the NETAR Website at https://netar.us/how-to-make-the-best-purchase-offer-in-a-sellers-market/
If the housing economists are right, the beginning of the housing bounce back will pick up in June and July with the full effects around the fourth quarter.
NETAR’s Trends Report will be available this week.
NETAR is the voice for real estate in Northeast Tennessee. It’s the largest trade association in Northeast Tennessee, Southwest Virginia region representing over 1,200 members and 100 affiliates involved in all aspects of the residential and commercial real estate industries.